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Two executives sit across a mahogany table. Both know the company is bleeding cash. Both know the other knows it. Yet neither has said it out loud. The moment someone speaks those words, everything changes. Not because new information entered the room, but because what was private knowledge became common knowledge.
This is the strange power of stating the obvious.
The Invisible Force at Every Table
Common knowledge sounds like it should be the most boring concept in negotiation. Everyone knows something, so what? But game theory reveals something peculiar: there’s a massive difference between everyone knowing a fact privately and everyone knowing it publicly.
Think of it like this. A thousand people might each separately realize the emperor has no clothes. But until someone shouts it in the town square, those thousand people cannot coordinate. They cannot act. The information sits trapped in individual minds, useless.
The moment it becomes common knowledge, spoken aloud where all can hear, the crowd can finally move together. The spell breaks.
What Makes Knowledge Common
True common knowledge requires layers. Alice knows something. Bob knows it too. But that’s not enough. Alice must know that Bob knows. Bob must know that Alice knows. And Alice must know that Bob knows that Alice knows. And so forth, into a potentially infinite regress.
This sounds like philosophical nonsense until you see it in action.
Picture a job interview. The candidate knows he’s their second choice. The hiring manager knows it too. He saw his notice the LinkedIn post for the same position reappear last week after their first choice declined. He knows he knows. He knows he knows. But nobody has said anything.
This situation creates tension without coordination. Both parties adjust their behavior based on private knowledge. He might lower his salary demand slightly. He might offer a bit less than planned. But both are still negotiating in the dark, making educated guesses about the other’s adjustments.
Now imagine the hiring manager says: “Cards on the table. You’re aware our first candidate declined. We’re very interested in you, but our budget is now tighter.”
Everything shifts. The knowledge is now common. They can negotiate around it explicitly. The candidate can respond: “I appreciate the honesty. Given that, here’s what I need to make this work.” Notice how the conversation becomes clearer, not cloudier.
The First Weapon: Forcing Acknowledgment
The most basic tactical use of common knowledge is forcing private information into the public sphere. This works because humans are terrible at coordinating around things they cannot openly discuss.
Consider salary negotiations. Your prospective employer almost certainly knows the market rate for your position. You know it too. Recruiters know it. Industry reports publish it. Yet companies benefit enormously from this information remaining private rather than common.
When a candidate says, “According to three sources I’ve consulted, the market rate for this role is between X and Y,” something magical happens. Not because the employer learns anything new, but because the negotiation can no longer pretend those numbers don’t exist. The private knowledge became common, and now both parties must account for it explicitly.
The same dynamic appears in business deals. Two companies might be merging. Everyone involved knows Company A’s main product line is declining. Analysts know it. The board knows it. The acquiring company definitely knows it. But until someone says it in the meeting room, everyone can pretend to negotiate as if that reality doesn’t exist.
The person who makes it common knowledge shifts the frame of the entire negotiation.
The Paradox of Saying What Everyone Knows
Here’s where it gets counterintuitive. Sometimes the worst thing you can do is make private knowledge common. Sometimes silence is the stronger play.
Back to that mahogany table with two executives. Both know the company is desperate. If neither speaks it aloud, they can maintain the fiction of strength. The suppliers might grant normal terms. The investors might not panic. The employees might keep working without anxiety.
But the moment one executive says in a board meeting, “We all know we’re in crisis mode,” that becomes the official reality. Common knowledge creates irreversibility. You cannot unring that bell.
This explains why companies go to absurd lengths to avoid saying certain things out loud, even when everyone knows them. Layoffs are “right sizing.” Failures are “learning experiences.” Desperate measures are “strategic pivots.”
It’s not stupidity. It’s strategy. As long as the knowledge stays private, people cannot coordinate their response to it.
The Strategic Silence
Skilled negotiators recognize when to weaponize silence instead of speech. If you know something unfavorable about your own position, and you know the other side knows it too, but it hasn’t become common knowledge yet, you might be wise to leave it there.
A consultant pitching to a struggling retail chain knows they’re in trouble. The executives know they’re in trouble. But if the consultant opens with “Given your dire situation,” she’s just made everything worse. She’s created common knowledge that forces everyone to negotiate from a position of acknowledged weakness.
Better to proceed as if the situation is merely “challenging” or “dynamic.” Let the private knowledge stay private. Both sides can maintain strategic ambiguity.
This is why you rarely hear negotiators say things like “We both know you have no other options” even when it’s true. Making it common knowledge might feel powerful, but it often forces the other side into corners they could have otherwise negotiated out of.
Building Cascades
The real power move is understanding how to create cascading common knowledge. This means making one piece of information common in a way that forces other pieces to become common as well.
Imagine a startup raising venture capital. The founders know their burn rate is unsustainable. The VCs suspect it. But it’s not common knowledge.
Now the founder says: “We’re accelerating our timeline to profitability.”
This seems positive. But watch what it makes common. If they’re accelerating the timeline, there must have been concerns about the original timeline. If there were concerns, the burn rate must be an issue. By making one thing common, the founder accidentally made several things common.
Experienced VCs will pounce: “What prompted this acceleration? Are runway concerns more serious than discussed in the deck?”
This cascade effect works in reverse too. Sometimes you can make one strategic piece of information common to prevent more damaging information from becoming common.
The Schelling Point
Sometimes common knowledge creates coordination points out of thin air. Thomas Schelling showed that when people need to coordinate but cannot communicate, they converge on focal points, things that stand out for reasons of symmetry, simplicity, or precedent.
But these focal points only work if they’re common knowledge. Everyone must know the point, know that others know it, and know that others know they know it.
In salary negotiations, round numbers often become Schelling points. Not because $100,000 is fundamentally different from $97,500, but because it’s a number everyone recognizes as a natural landmark. It becomes common knowledge that this is where people might coordinate.
Smart negotiators can sometimes establish artificial Schelling points by making them common knowledge. A buyer might say: “Industry standard is 60 day payment terms.” Even if that’s only loosely true, by stating it definitively, she’s trying to make it a coordination point. If the seller accepts this as common knowledge, they might settle there even if they could have pushed for different terms.
The Information Everyone Ignores
Here’s a fascinating counterintuitive aspect: common knowledge is often ignored precisely because it’s common. If everyone knows something, it gets priced in, anticipated, normalized. It loses its power to surprise.
This creates opportunity. In negotiations, sometimes the most powerful information to highlight is not the secret knowledge but the common knowledge everyone has started to ignore.
A real estate agent selling a house in a declining neighborhood might make the market trends common knowledge: “As we all know, this area has seen prices drop 15% this year.” This seems like terrible strategy. But watch what comes next: “Which is exactly why this property, priced 20% below last year’s comps, represents exceptional value right now.”
By making the bad news common knowledge, he reframed it from a secret problem into a publicly acknowledged opportunity. The information was always there, but making it explicitly common changed how it functions in the negotiation.
The Emperor’s New Clothes Moment
The tale illustrates perfectly how common knowledge creates regime change. Everyone privately knew the emperor was naked. But that private knowledge had no power. It couldn’t coordinate action. It couldn’t force change.
The child’s announcement created common knowledge. Suddenly everyone could acknowledge what they all knew. And that acknowledgment made the previous regime untenable.
In negotiations, these moments are rare but devastating. Someone finally says what everyone knows but nobody has stated. The merger is going to destroy culture. The product is behind schedule because of bad management, not technical challenges. The client is going to churn because we’re overcharging for mediocre service.
These announcements don’t add information. They change the game by making coordination possible.
The question is whether you want to be the child who shouts the truth, or the one who benefits from continued ambiguity. Sometimes being first to make knowledge common gives you power. Sometimes it makes you a target.
The art is knowing which is which.
The Practical Toolkit
So how do you actually use this?
First, audit what everyone knows privately but nobody has said publicly in your negotiation. That gap is your working material. Each piece of private knowledge that could become common is a potential lever.
Second, ask whether making it common helps or hurts your position. If you’re strong, making your strength common often reinforces it. If you’re weak, keeping weakness private usually helps.
Third, watch for opportunities to make the other side’s unfavorable information common. Not in a gotcha way, but as a frame for negotiation. “Given that we both know X, let’s talk about how we work around it.”
Fourth, use questions to force knowledge into the common sphere. “Would you agree that the market has shifted?” is different from thinking privately that it has. The question attempts to create common knowledge.
Fifth, recognize when the other side is trying to make knowledge common and decide whether to let them. You can often deflect with ambiguity: “That’s one perspective” rather than “Yes, you’re right.”
Information doesn’t just exist. It exists in states. Private, shared, common. Each state creates different strategic possibilities.
The same fact can be a weakness when common and a non issue when private.
Master negotiators don’t just think about what people know. They think about what people know that others know, and what everyone knows that everyone knows.
The game isn’t just about having information. It’s about controlling whether that information remains private knowledge or becomes common.
That control, more than the information itself, determines who wins.
